Zediva suspends operations

Court rules against online video streamer

Internet streaming service Zediva is suspending operations after Hollywood studios won a permanent injunction prohibiting the company from streaming the latest homevideo releases from a bank of DVD players to its customers.

U.S. District Judge John F. Walter issued the injunction on Friday, ruling that the company is “permanently restrained and enjoined” from using the copyrighted material unless it receives permission.

Zediva had argued that its service was no different than a brick-and-mortar videostore, which rents movies without getting the permission of studios. In August, Walter granted a preliminary injunction to the studios and said that Zediva violated their right of public performance. He said that the company violated the “transmit” clause of the Copyright Act.

The company altered its Web page with the word “intermission” bannered across the top and a message explaining that it was suspending operations.

“A couple of years ago we came up with an idea for the next generation of DVD rentals,” the message stated. “It seemed to us logical and evolutionary that if a customer was able to rent and play a DVD in his home, there should be no reason why he or she could not do that from the Internet cloud. After all, you can do that with a DVR, so why not with a DVD player?

“While we hope to be back online soon, we don’t know when (or whether) that will happen. We are disappointed by this turn of events, and that we are not permitted to serve you.”

MPAA senior VP-associate general counsel Dan Robbins said in a statement, “This result sends a strong message to those who would exploit the studios’ works in violation of copyright law, on the Internet or elsewhere, and it is an important victory for the more than 2 million American men and women whose livelihoods depend on a thriving film and television industry.”

Studios worried that Zediva undercut their video windows with cable on-demand services as well as streaming outlets like Netflix, Amazon and Apple TV.

“Those services pay the studios licensing fees for the right to stream movies, and those fees allow the studios to invest in new movies and compensate the writers, directors, actors, set designers, caterers, electricians and countless others whose work contributes to movies,” Robbins said.